El Pollo Loco Holdings (LOCO) risk factors, FY2025 10-K

Risks Related to Our Operations

1. 01We may be unsuccessful in opening new company-operated or franchised restaurants or in establishing new markets, which could adversely affect our growth45% rewritten
2. 02If we are unable to successfully manage these risks and open new restaurants or sign new franchisees as anticipated, or if restaurant openings are significantly delayed, we could face increased costs and lower than anticipated sales and earnings in future periods
3. 03We may not be able to compete successfully, including with other quick-service and fast casual restaurants21% rewritten
4. 04We are vulnerable to changes in political and economic conditions such as trade policies, tariff and import regulations by the United States, as well as consumer preferences34% rewritten
5. 05If we are unable to attract, develop, assimilate, and retain employees, we may not be able to grow or successfully operate our business
6. 06Our business could be negatively affected by regional geographic concentrations
7. 07Our inability or failure to execute our business continuity and response plan following a major disaster such as a natural disaster, terrorism, social unrest or a cybersecurity incident affecting our corporate facilities could materially adversely affect our business
8. 08Our long-term success depends in part on our ability to effectively identify and secure appropriate sites for new restaurants35% rewritten
9. 09residential and infrastructure development near the potential restaurant site; and availability of acceptable lease terms and arrangements, including construction costsNew
10. 10We have incurred, and may continue to incur, significant impairment of certain of our assets, particularly in our new markets
11. 11Changes in food costs, supply costs, and other operating expenses, especially for chicken could adversely affect our business, financial condition, and results of operations
12. 12Public health crises have had, and may in the future have, a significant negative impact on our business, sales, results of operations and financial condition56% rewritten
13. 13Negative social media and other negative publicity could have a material adverse impact on our business
14. 14We rely on our ability to continue to expand our digital business, delivery orders and catering, and these business lines are subject to various risks
15. 15Food-borne illness and other food safety and quality concerns may negatively impact our business and profitability
16. 16Failure to receive timely deliveries of food or other supplies could result in a loss of revenue and materially and adversely impact our operations
17. 17Our level of indebtedness, and restrictions under our credit facility, could materially and adversely affect our business, financial condition, and results of operations
18. 18Our marketing programs may not be successful, and our new menu items, advertising campaigns, and restaurant designs and remodels may not generate increased sales or profits
19. 19Adverse changes in our franchisees’ economic position could have adverse consequences to us73% rewritten
20. 20We are dependent on the success of our franchisees, but have limited control with respect to their operations, which could have a negative impact on our business41% rewritten
21. 21If our relations with existing or potential franchisees deteriorate, restaurant performance and our development pipeline could suffer
22. 22Our self-insurance programs may expose us to significant and unexpected costs and lossesNew
23. 23We are party to long-term and non-cancelable leases, and may be unable to renew leases at the ends of their terms
24. 24If we are unable to achieve our corporate responsibility goals, our reputation and results of operations could be adversely affectedNew

Risks Related to Information Technology and Data Security

1. 25Information technology system failures or breaches of our network security could interrupt our operations and adversely affect our business
2. 26If we are unable to protect our customers’ payment method data or personal information, we could be exposed to data loss, litigation, liability, and reputational damage

Risks Related to Intellectual Property

1. 27The failure to enforce and maintain our trademarks and protect our other intellectual property could materially and adversely affect our business, including our ability to establish and maintain brand awareness

Risks Related to Government Regulation and Litigation

1. 28Matters relating to employment and labor law may adversely affect our business
2. 29We are from time to time the target of class action lawsuits and other claims proceedings, which could adversely affect our business and results of operations
3. 30If we or our franchisees face labor shortages or increased labor costs, our results of operations and growth could be adversely affected
4. 31We are subject to extensive laws, government regulation, and other legal requirements and our failure to comply with existing or new laws and regulations could adversely affect our operational efficiencies and results of operations
5. 32Legislation and regulations regarding certain of our menu offerings, new information, attitudes, or regulations regarding diet and health, or adverse opinions about the health effects of consuming our menu offerings, could affect consumer preferences and negatively impact our results of operations38% rewritten
6. 33We may become subject to liabilities arising from environmental laws that could increase our operating expenses and materially and adversely affect our business and results of operations

Risks Related to Ownership of Our Common Stock

1. 34Our quarterly operating results may fluctuate significantly due to seasonality and other factors, some of which are beyond our control, which could adversely affect the market price of our common stock
2. 35Future offerings of debt or equity securities by us may adversely affect the market price of our common stock or dilute the ownership of our existing stockholders
3. 36Delaware law, our organizational documents, our shareholder rights agreement and our existing and future debt agreements may impede or discourage a takeover, depriving our investors of the opportunity to receive a premium for their shares
4. 37Shareholder activism could cause us to incur significant expense, disrupt our business, result in a proxy contest or litigation and impact our stock price32% rewritten